Global Expansion of Renewable Energy Generation: An Evaluation of Policy Instruments Sanya Carley USAEE Conference July, 2013.

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Presentation transcript:

Global Expansion of Renewable Energy Generation: An Evaluation of Policy Instruments Sanya Carley USAEE Conference July, 2013

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Policy Effectiveness FIT: provides certainty to investors ▫ Previous studies find effect on renewable energy development, particularly solar RPS: direct regulation ▫ Previous studies demonstrate mixed results Relative effectiveness? All such studies limited to EU or US 6

Research Overview Research Questions: Which factors explain RE deployment across a wide variety of country contexts? Are energy policies an important factor? Methodological Approach: Fixed effects model with sample of countries (165) between 1990 and 2010 (n= 2,896); robust standard errors. 7

Variables Dependent variables: Renewable energy generation, including and excluding hydro; % of renewable energy generation, including and excluding hydro Policy variables: RPS, FIT, subsidies, framework laws Control variables: political factors, macro-economic factors, energy market factors 8

9 Independent Variables Model 1: All Renewable Energy (billion kWhs) Model 2: Non-hydro Renewable Energy (billion kWhs) Policies RPS (3.440)0.213 (1.307) FIT (2.283) (0.531) Framework*RPS25.757** (12.841) 7.306*** (1.866) Framework*FIT22.449*** (5.620)2.946*** (0.814) Framework-6.390** (2.504)-1.848*** (0.542) Subsidies6.562*** (1.952)0.409* (0.222) Political and Economic Factors Political freedom0.731** (0.370)0.285*** (0.068) Commercial finance-0.033* (0.017)-0.024*** (0.004) CDM7.194*** (2.020) (0.284) FDI/GDP-0.032** (0.016)-0.014*** (0.004) GDP per capita (0.0002)0.0002*** ( ) GDP per capita squared ** ( )- Population growth-0.767*** (0.214)-0.244*** (0.085) Energy Market Characteristics Electricity growth2.246* (1.190) (0.312) Oil exports0.065*** (0.015)0.023*** (0.005) NG exports (0.003) (0.0009) Coal exports (0.0001) ** ( ) Constant12.964*** (3.019)1.779** (0.784) No. observations 2896 Adjusted R

10 Independent Variables Model 1: All Renewable Energy (billion kWhs) Model 2: Non-hydro Renewable Energy (billion kWhs) Policies RPS (3.440)0.213 (1.307) FIT (2.283) (0.531) Framework*RPS25.757** (12.841) 7.306*** (1.866) Framework*FIT22.449*** (5.620)2.946*** (0.814) Framework-6.390** (2.504)-1.848*** (0.542) Subsidies6.562*** (1.952)0.409* (0.222) Political and Economic Factors Political freedom0.731** (0.370)0.285*** (0.068) Commercial finance-0.033* (0.017)-0.024*** (0.004) CDM7.194*** (2.020) (0.284) FDI/GDP-0.032** (0.016)-0.014*** (0.004) GDP per capita (0.0002)0.0002*** ( ) GDP per capita squared ** ( )- Population growth-0.767*** (0.214)-0.244*** (0.085) Energy Market Characteristics Electricity growth2.246* (1.190) (0.312) Oil exports0.065*** (0.015)0.023*** (0.005) NG exports (0.003) (0.0009) Coal exports (0.0001) ** ( ) Constant12.964*** (3.019)1.779** (0.784) No. observations 2896 Adjusted R

11 Independent Variables Model 1: All Renewable Energy (billion kWhs) Model 2: Non-hydro Renewable Energy (billion kWhs) Policies RPS (3.440)0.213 (1.307) FIT (2.283) (0.531) Framework*RPS25.757** (12.841) 7.306*** (1.866) Framework*FIT22.449*** (5.620)2.946*** (0.814) Framework-6.390** (2.504)-1.848*** (0.542) Subsidies6.562*** (1.952)0.409* (0.222) Political and Economic Factors Political freedom0.731** (0.370)0.285*** (0.068) Commercial finance-0.033* (0.017)-0.024*** (0.004) CDM7.194*** (2.020) (0.284) FDI/GDP-0.032** (0.016)-0.014*** (0.004) GDP per capita (0.0002)0.0002*** ( ) GDP per capita squared ** ( )- Population growth-0.767*** (0.214)-0.244*** (0.085) Energy Market Characteristics Electricity growth2.246* (1.190) (0.312) Oil exports0.065*** (0.015)0.023*** (0.005) NG exports (0.003) (0.0009) Coal exports (0.0001) ** ( ) Constant12.964*** (3.019)1.779** (0.784) No. observations 2896 Adjusted R

12 Independent Variables Model 1: All Renewable Energy (billion kWhs) Model 2: Non-hydro Renewable Energy (billion kWhs) Policies RPS (3.440)0.213 (1.307) FIT (2.283) (0.531) Framework*RPS25.757** (12.841) 7.306*** (1.866) Framework*FIT22.449*** (5.620)2.946*** (0.814) Framework-6.390** (2.504)-1.848*** (0.542) Subsidies6.562*** (1.952)0.409* (0.222) Political and Economic Factors Political freedom0.731** (0.370)0.285*** (0.068) Commercial finance-0.033* (0.017)-0.024*** (0.004) CDM7.194*** (2.020) (0.284) FDI/GDP-0.032** (0.016)-0.014*** (0.004) GDP per capita (0.0002)0.0002*** ( ) GDP per capita squared ** ( )- Population growth-0.767*** (0.214)-0.244*** (0.085) Energy Market Characteristics Electricity growth2.246* (1.190) (0.312) Oil exports0.065*** (0.015)0.023*** (0.005) NG exports (0.003) (0.0009) Coal exports (0.0001) ** ( ) Constant12.964*** (3.019)1.779** (0.784) No. observations 2896 Adjusted R

13 Independent Variables Model 1: All Renewable Energy (billion kWhs) Model 2: Non-hydro Renewable Energy (billion kWhs) Policies RPS (3.440)0.213 (1.307) FIT (2.283) (0.531) Framework*RPS25.757** (12.841) 7.306*** (1.866) Framework*FIT22.449*** (5.620)2.946*** (0.814) Framework-6.390** (2.504)-1.848*** (0.542) Subsidies6.562*** (1.952)0.409* (0.222) Political and Economic Factors Political freedom0.731** (0.370)0.285*** (0.068) Commercial finance-0.033* (0.017)-0.024*** (0.004) CDM7.194*** (2.020) (0.284) FDI/GDP-0.032** (0.016)-0.014*** (0.004) GDP per capita (0.0002)0.0002*** ( ) GDP per capita squared ** ( )- Population growth-0.767*** (0.214)-0.244*** (0.085) Energy Market Characteristics Electricity growth2.246* (1.190) (0.312) Oil exports0.065*** (0.015)0.023*** (0.005) NG exports (0.003) (0.0009) Coal exports (0.0001) ** ( ) Constant12.964*** (3.019)1.779** (0.784) No. observations 2896 Adjusted R

Implications Renewable portfolio standards and feed-in tariffs are drivers of renewable energy but only statistical significant when supported by framework laws ▫ When considering entire range of countries in sample, this distinction is important Subsidies play an important supporting role for renewable energy development These policies drive both hydro and non-hydro renewable energy Non-policy factors are very important as well: political freedom, country wealth, energy resources 14

Questions? Contact Information: Sanya Carley Assistant Professor School of Public and Environmental Affairs, Indiana University Collaborators: Elizabeth Baldwin, Lauren MacLean, Jennifer Brass

VariableDescriptionMeanStandard Deviation MinimumMaximum Total REAnnual renewable electricity generation (billion kwhs) Total non-hydro REAnnual non-hydroelectric RE generation (billion kwhs) Percent RERenewable electricity as % of annual electricity generation Percent non-hydro RENon-hydroelectric renewable electricity as % of annual electricity generation FITFeed-in tariff exists for any renewable resource Non-hydro FITFeed-in tariff exists for any non-hydroelectric renewable resource RPSRenewable Portfolio Standard or mandatory renewable quota obligation in place SubsidiesCountry provides subsidies for RE as tax reductions or production/investment incentives Non-hydro subsidiesCountry provides subsidies for non-hydro RE as tax reductions or production/investment incentives FreedomFreedom House rating (political freedom and civil liberties) FrameworkLegal and regulatory framework for RE in place Commercial financePrivate sector share of financial sector, divided by CDMCountry has hosted Clean Development Mechanism projects FDI/GDPForeign direct investment as a % of gross domestic product, divided by GDP per capitaGross domestic product per capita (thousand $US) Population growthAnnual population growth Electricity growthAnnual change in electricity consumption Oil exportsAnnual oil exports (barrels per day) NG exportsAnnual natural gas exports (million cubic feet) Coal exportsAnnual coal exports (short tons)

17 Independent Variables Model 1: All Renewable Energy (billion kWhs) Model 2: Non-hydro Renewable Energy (billion kWhs) Policies RPS (3.440)0.213 (1.307) FIT (2.283) (0.531) Framework*RPS25.757** (12.841) 7.306*** (1.866) Framework*FIT22.449*** (5.620)2.946*** (0.814) Framework-6.390** (2.504)-1.848*** (0.542) Subsidies6.562*** (1.952)0.409* (0.222) Political and Economic Factors Political freedom0.731** (0.370)0.285*** (0.068) Commercial finance-0.033* (0.017)-0.024*** (0.004) CDM7.194*** (2.020) (0.284) FDI/GDP-0.032** (0.016)-0.014*** (0.004) GDP per capita (0.0002)0.0002*** ( ) GDP per capita squared ** ( )- Population growth-0.767*** (0.214)-0.244*** (0.085) Energy Market Characteristics Electricity growth2.246* (1.190) (0.312) Oil exports0.065*** (0.015)0.023*** (0.005) NG exports (0.003) (0.0009) Coal exports (0.0001) ** ( ) Constant12.964*** (3.019)1.779** (0.784) No. observations 2896 Adjusted R

18 Independent Variables Model 1: All Renewable Energy (billion kWhs) Model 2: Non-hydro Renewable Energy (billion kWhs) Policies RPS (3.440)0.213 (1.307) FIT (2.283) (0.531) Framework*RPS25.757** (12.841) 7.306*** (1.866) Framework*FIT22.449*** (5.620)2.946*** (0.814) Framework-6.390** (2.504)-1.848*** (0.542) Tax subsidies6.562*** (1.952)0.409* (0.222) Political and Economic Factors Political freedom0.731** (0.370)0.285*** (0.068) Commercial finance-0.033* (0.017)-0.024*** (0.004) CDM7.194*** (2.020) (0.284) FDI/GDP-0.032** (0.016)-0.014*** (0.004) GDP per capita (0.0002)0.0002*** ( ) GDP per capita squared ** ( )- Population growth-0.767*** (0.214)-0.244*** (0.085) Energy Market Characteristics Electricity growth2.246* (1.190) (0.312) Oil exports0.065*** (0.015)0.023*** (0.005) NG exports (0.003) (0.0009) Coal exports (0.0001) ** ( ) Constant12.964*** (3.019)1.779** (0.784) No. observations 2896 Adjusted R